With the progressive dismantling of formal trade barriers as a result of many rounds of global trade negotiations, subsidies have become increasingly important as a way for governments to regulate economic activity within their territories.
Headlines were made this year when Sandra Polaski, former U.S. secretary of state's special representative for international labor affairs, released her study Winners and Losers: Impact of the Doha Round on Developing Countries. The results revealed a sharp contrast to those released during the early stages of the Doha Round negotiations, and sparked much debate over the value of a new WTO agreement.
Oxfam has released a research report, by Lance Taylor and Rudiger von Arnim (both of the New School for Social Research, New York) that presents a review and critique of the most widely used trade models based on computable general equilibrium (CGE) models. The emphasis throughout Modelling the Impact of Trade Liberalisation: A Critique of Computable General Equilibrium Models is on methodology.
The Cato Institute's Center for Trade Policy Studies has taken aim at US government policies toward its dairy industry. A policy briefing, "Milking the Customer: The High Cost of U.S. Dairy Policies", says that the complex array of price supports, dairy market loss payments, federal and state marketing orders, classified pricing, and export subsidies, costs tax-payers some US$ 4 billion a year, provides over 40% of dairy farmers' incomes and depresses world prices.
A working paper from the International Monetary Fund (IMF), "The Magnitude and Distribution of Fuel Subsidies: Evidence from Bolivia, Ghana, Jordan, Mali and Sri Lanka", explores the strain that high oil prices are placing on government budgets. Many governments are reluctant to pass these price increases onto energy users, and so energy price subsidies are absorbing an increasing share of scarce public resources.
A report from the Fisheries Economics Research Unit at the University of British Columbia's Fisheries Centre estimates that bottom trawl fleets operating in the high seas receive an average of US$ 152 million a year, consitituting15% of the total landed value of the fleet.
In a recent article ("A New Agenda for Global Warming"), Joseph Stiglitz, Nobel laureate in economics and former Chief Economist at the World Bank, suggests that Japan, Europe, and the other signatories of Kyoto should immediately bring a WTO subsidy case against the United States for not ratifying the Kyoto Convention and for not taxing adequately CO2 emissions by US firms.